The SEC has appealed against the July 2023 ruling that determined that Ripple’s XRP sales on digital asset trading platforms, executives’ sales, and other distributions of XRP did not constitute investment contracts.
The appellate court will now conduct a de novo review of the SEC’s claims against Ripple’s XRP transactions. The outcome of this appeal could have significant implications for the future of the digital asset industry, as it will set a precedent for future cases involving cryptocurrencies and securities.
Ripple is expected to file its own Form C for a cross-appeal next week, contesting either the $125 million fine or the decision that institutional sales of XRP were securities. Following the ruling, Ripple was ordered to pay a $125 million penalty for unregistered securities offerings through institutional XRP sales.
The SEC has appealed against the July 2023 ruling that declared Ripple’s sales of XRP on digital asset trading platforms, and those of executives Brad Garlinghouse and Chris Larsen, as not constituting securities transactions. Commenting on the SEC’s decision to appeal, law expert Jeremy Hogan called it a “chicken move.” The decision to appeal was widely expected, as the SEC had initially sought nearly $2 billion in penalties from Ripple.
However, the decision to contest the ruling that favored Ripple has caused surprise among some legal experts. The filing also seeks a de novo review of other aspects of the ruling.
The legal dispute may now drag on until early 2026, potentially leading to further penalties or operational restrictions for Ripple.
